1. Next-Generation Rewards:
Changing the Customer Engagement Paradigm
Stuart Cook

2. Loyalty evolution in financial services
Amex
Membership miles
Amex points for gift cards
1990
2005
1985
1995
Diners club rewards
Citibank Rewards 24 months redeemable
Redemption options and customer experience have shown little innovation over the last 30 years.

3. Increasing Competition
25% of CFIs have vanished since 2008
In 1995, megabanks with more than $100 billion in assets controlled 17% of all banking assets. By 2005, their share reached 41% it was 59%.
The six largest issuers represent 2/3 of the credit card market spending over $22 billion on rewards programs.
Attracting consumers with a big incentive, and then keeping them with strong ongoing value propositions across their product portfolio.

4. Consumer Trends
Indicate a strong preference for local banking and rewards. Financial institutions and their reward programs aren’t differentiating themselves.
There is real opportunity for CFIs to utilize highly effective rewards and incentives to truly differentiate the service, reinforce customer relationships, and foster genuine loyalty.
65% are willing to
increase their wallet share with a financial institution that rewards account holders
78% of consumers believe it’s important to bank locally
88% say rewards for basic banking activities is a top priority in choosing where to bank
1 in 3 millennials are open to switching from their megabank

5. best customer experience anywhere?
What’s my
best customer experience anywhere?

6. CFI’s advantage is that you know your consumers and market in ways that national players never can. Your consumers crave a real banking relationship, a trusted partner, and a genuine community connection. 
Keys to Success:
Build your strategy on being relational, not transactional.
Utilize platform and technology solutions that create compelling engagement and drive stronger relationships with each interaction.
Don’t write in slide but say that these can be infinitely combined​
CFIs are uniquely positioned to beat National Banks at their own game and exploit their weakness.

7. You must create value for your customers, yourself and your community
Customer Engagement
Smart technology keeps customers engaged.
Offer instant access via “in-the-moment” engagement.
Interact with your customers in their channel of choice - mobile, web, and soon, messaging.
Provide valuable customer incentives to drive profitable behavior.

8. You must create value for your customers, yourself and your community
Revenue Enhancement
Drive profitable cardholder behavior and activate dormant accounts.
Increase card usage and spending averages by awarding points for each transaction.
Use points as currency to differentiate banking products and capitalize on cross-sell opportunities.
Discover potential target audiences via program analytics for incentive-based campaigns that enhance interest income.

9. You must create value for your customers, yourself and your community
Community Impact
Incentivize and reward shopping locally by providing double points at local businesses and awarding increased point values for local business redemptions.
Provide a differentiator to allow your CFI to stand apart from local and national competition.
Build relationships with local businesses and create opportunities for small business account services.
Cultivate your brand by including local charities as a redemption option.

10. The point of departure for addressing this new customer service expectation is technology

11. Commoditized, Traditional Services
Can be dated and ridged
Lack integrated marking support
Fail to deliver on ROI promises
Not designed for millennials
High training and support costs
Fail to engage consumers
Commoditized, Traditional Services

12. The new generation of technology services
Context and Relevance
Immediacy
Instant Access to benefits of being a consumer
Increased revenue and profitability
The new generation of technology services

13. Let’s look at how these apply specifically to CFIs.

14. Contextual and relevant

15. Immediacy –
you’re right where they are

16. to the benefits of being a customer
Instant access
to the benefits of being a customer

17. Increased revenue and profitability

18. How do you begin?
Work from your customer back as a guide to innovation

19. Let’s Reframe The question isn’t “How can I create a loyal customers?”
It’s “Am I loyal to my customers?”

20. It’s not just about
your bottom line, it’s about helping your customers make their money go further.

21. One size fits all loyalty is long gone – relevant rewards

22. Leveraging data analysis for customized experiences

23. Real-Time Engagement with in-the-moment messaging

24. Real-Time Rewards Revenue Rewards Return on investment
The power to redeem rewards instantly in-store, without the hassle of vouchers, print-outs or QR codes. Buzz Points creates a seamless redemption experience for consumers and merchants alike with Real-Time Rewards.  ​
Revenue
Rewards
Return on investment
Boost interchange revenue by incentivizing consumers to make your card top of wallet.
Give consumers the rewards
they crave—cash back when they
make qualifying purchases at merchants.
Forrester TEI study illustrated an ROI of 139% over three years, with payback in under 6 months.

25. Case Study Transaction Campaign
Case Study: Using Gamification to Incentivize Profitable Behavior
Goal: Drive increased transactions and change habitual behavior.
Strategy: Use gamification to create a fun challenge for cardholders to increase card usage in a specific time period.
Result: 
Both “winners” of the points, and those that didn’t “win” increased usage during the allotted time period.
Transaction lift sustained, even after 3 months.
Incentive-driven campaign results in changed behavior and moves Buzz Points enrolled cards to top of wallet.

26. Technology innovations for loyalty programs include
Frictionless reward redemption, with cash back to consumers
Real-Time Rewards at the moment of truth
In-the-moment service across channels: message, mobile, social
Technology innovations for loyalty programs include

27. Innovative loyalty programs for CFIs also
Incentivize desired behavior
Differentiate from mega-banks
Gamify experiences
Have an impact on every aspect of the Customer Lifecycle
Prevent commoditization

28. Any Questions?